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How (And When) To Take A Risk: Graduation Wisdom From Netflix Co-Founder Marc Randolph

Netflix’s co-founder and former CEO Marc Randolph enjoys mentoring new waves of entrepreneurs. In the process, he’s come to the conclusion that colleges don’t produce nearly as many good entrepreneurs as they could.

An avid rock climber and mountain climber, Netflix co-founder Marc Randolph says one key to entrepreneurship is to be able to set out without having the summit clearly in sight.

“If you look back at what the students were taught, the reason why is obvious,” Randolph says. “The risk tolerance has been bred out of them.” Students at the high-school level avoid challenging courses that could wreck their odds of getting into a selective college, he says—and once in college, these students shy away from challenging and novel courses that might tarnish their GPAs.

Randolph set about looking for ways to turbo-charge the preparation of aspiring world-changers. Along with serving as a board member of organizations such as the promising Santa Cruz-based startup Looker and the career-networking firm Readyforce, he’s been active in mentoring entrepreneurs at Middlebury College and his alma mater,Hamilton College.

A few key principles guide Randolph’s mentoring work:

1. Now is better than later.

When’s the best time to take your first risk as an entrepreneur? Yesterday, ideally.

In a perfect world, Randolph says, an entrepreneur has been building up her risk-taking muscles since childhood. He says that a large number of natural-born entrepreneurs take to candy arbitrage as grade-schoolers, or go on to run small businesses out of their dorm rooms. The advantage of these experiences is that the young entrepreneur learns real-life business lessons in a relatively low-stakes way—before her decisions might have huge impacts on the livelihoods and futures of large numbers of people.

But if you weren’t an entrepreneur yesterday, remember that today is still better than tomorrow. Risk-taking never gets easier, Randolph says, and delaying your entry into entrepreneurship till the “ideal” moment may reinforce your risk-avoidant side to a point of no return.

There is no better time than now for aspiring entrepreneurs to hone their craft, Randolph tells new college grads (Photo credit: Wikipedia)

There may be no better time than college graduation to dive whole-heartedly into entrepreneurship. “Now is the time to work for nothing, now is the time to learn,” Randolph says. “Take any job in a growing, exciting company. You’ll learn so much. You’ll see people who do it well. You’ll learn from going out to drinks with people from other companies.” In this hyper-charged environment the young entrepreneur exchanges and tests ideas, and also gets to see “how the sausage is made.” She gets thrown into responsibilities that exceed her abilities and which force her to sink or swim.

2. Swim in environments that promote risk-taking and innovation.

Move to a San Francisco or a Boulder or a New York,” Randolph says, to capitalize on active startup cultures. “Opportunities are being created there so quickly. New jobs are being created every few weeks. And if you don’t like a job, just wait six months and a better one comes along.”

Other areas, like Seattle and L.A.’s Silicon Beach, are also becoming premier startup ecosystems. (Forbes contributor Lori Kozlowski recentlyexamined developments at Silicon Beach, which has caught fire thanks to a critical mass of digital-media talent, creative and entertainment talent, accelerators and incubators like Amplify LA, and the influence of research giants Caltech, USC and UCLA.)

3. Be willing to get your hands dirty.

In the early stages, being an entrepreneur isn’t about being your own boss, Randolph concedes. “You need to be able to do anything that someone asks you to,” he says. But over time, “It’s one of the best ways to have control over what you do every day.”

4. Get moving, now, even though the summit isn’t yet in sight.

“Just do something,” Randolph advises. As he once advised an audience of Hamilton students, “Do something crappy, and get it out there.”

An avid rock climber, Randolph notes that a climber’s path only becomes visible gradually, once the first steps have been taken and the climber is a few feet off the ground. If an entrepreneur refuses to budge until she can see the entire way forward, she’ll never leave the safety of the ground.

He notes that Netflix evolved in ways the founders never could have imagined at the outset. And given how it’s so much easier for a person to create a company today than just 15 years ago, he says there are fewer reasons than ever to resist taking a chance on a new enterprise.

“There’s no time like the present,” Randolph says. “It only gets harder as you move further from your education. You’ll have a nice car, rent to pay, and then maybe a mortgage. If it seems scary now, it’ll be doubly or triply scary later.”

In the end, Randolph distills his advice and his experiences to one observation about risk-taking, which he offers to college graduates this spring: “It’s worth it.”